Sears 2013 Annual Report Download - page 105

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
105
NOTE 13—STORE CLOSING CHARGES, SEVERANCE COSTS AND IMPAIRMENTS
Store Closings and Severance
In accordance with accounting standards governing costs associated with exit or disposal activities, expenses
related to future rent payments for which we no longer intend to receive any economic benefit are accrued for when
we cease to use the leased space and have been reduced for any income that we believe can be realized through sub-
leasing the leased space. During 2013, 2012 and 2011, respectively, we closed 70, 92 and 18 stores in our Kmart
segment and 23, 147 and 47 stores in our Sears Domestic segment we previously announced would close. We
recorded charges for the related lease obligations of $16 million, $34 million and $1 million for 14, 61 and 6 of these
stores at Kmart during 2013, 2012 and 2011, respectively, and of $34 million and $4 million for 50 and 8 of these
stores at Sears Domestic during 2012 and 2011, respectively.
We do not expect additional charges recorded during 2014 related to stores we made the decision to close in
2013 to be material.
We made the decision to close 113, 48 and 74 stores in our Kmart segment and 32, 12 and 173 stores in our
Sears Domestic segment during 2013, 2012 and 2011, respectively.
Store closing costs and severance recorded for 2013, 2012 and 2011 were as follows:
millions Markdowns(1) Severance
Costs(2)
Lease
Termination
Costs(2) Other
Charges(2)
Impairment
and
Accelerated
Depreciation(3)
Total
Store
Closing
Costs
Kmart . . . . . . . . . . . . . . . . . . . . . $ 45 $ 10 $ 16 $ 18 $ 12 $ 101
Sears Domestic . . . . . . . . . . . . . . 11 (3) (39) — 12 (19)
Sears Canada. . . . . . . . . . . . . . . . 1 52 — 2 — 55
Total 2013 costs . . . . . . . . . . . . . $ 57 $ 59 $ (23) $ 20 $ 24 $ 137
Kmart . . . . . . . . . . . . . . . . . . . . . $ 21 $ 13 $ 34 $ 8 $ 9 $ 85
Sears Domestic . . . . . . . . . . . . . . 14 2 34 (6) 13 57
Sears Canada. . . . . . . . . . . . . . . . — 16 (1) 5 — 20
Total 2012 costs . . . . . . . . . . . . . $ 35 $ 31 $ 67 $ 7 $ 22 $ 162
Kmart . . . . . . . . . . . . . . . . . . . . . $ 46 $ 14 $ 1 $ 15 $ 5 $ 81
Sears Domestic . . . . . . . . . . . . . . 84 41 4 31 85 245
Sears Canada. . . . . . . . . . . . . . . . — 18 — — — 18
Total 2011 costs . . . . . . . . . . . . . $ 130 $ 73 $ 5 $ 46 $ 90 $ 344
_____________
(1) Recorded within Cost of sales, buying and occupancy on the Consolidated Statements of Operations.
(2) Recorded within Selling and administrative on the Consolidated Statements of Operations. Lease termination
costs are net of estimated sublease income, and include the reversal of closed store reserves for which the
lease agreement has been terminated and the reversal of deferred rent balances related to closed stores.
(3) 2013 costs include $13 million recorded within impairment charges and $11 million recorded within
Depreciation and amortization on the Consolidated Statements of Operations. 2011 costs include $82 million
recorded within impairment charges and $8 million recorded within Depreciation and amortization on the
Consolidated Statements of Operations. 2012 costs are recorded within Depreciation and amortization on the
Consolidated Statements of Operations.